Interim Report 11 May 2016

Transcription

1 Interim Report 11 May May

2 Table of contents Key aspects of the review period Operating environment Business operations and strategy progress Outlook 11 May

3 Key aspects of the review period VVO Group s turnover grew to EUR 95.9 million Net rental income was EUR 60.8 million Investments in growth centres totalled EUR 43.7 million 1,046 rental apartments under construction 28,386 Lumo rental apartments, accounting for 6.5% of the nonsubsidised market Car sharing was extended to Vantaa and Oulu More than 350 agreements through the Lumo kotinyt.fi service 11 May

4 Operating environment The development of the Finnish economy continued to be subdued. The confidence of households and companies in the development of the economy was weak. The number of those employed increased slightly. Demand for rental housing remained high in growth centres. There was still clear demand for new homes in the Helsinki Metropolitan Area. New construction clearly focused on privately financed rental apartments. The market situation for the construction of owneroccupied apartments enabled better-than-average implementation of negotiated contracts for rental housing development. The slowness of the zoning process, particularly in the Helsinki Metropolitan Area, made it harder to launch the construction of new rental apartments. Market based rental apartments, total 434,000 (Year 2015) Investors Households/Small investors 68% 32% 11 May

5 Business operations and strategy progress 11 May

6 Turnover and profit before taxes developed steadily EUR million Turnover EUR million Profit before taxes As of 2014, the Group adopted IFRS for its financial reporting. 11 May

7 Net rental income grew (Lumo segment) EUR million * *As of 2014, the Group adopted IFRS for its financial reporting. 11 May

8 Investments in Lumo business operations continued EUR million Gross investments and sales of investment properties EUR million Renovations (repairs recognised as expenses & additional repair investments) Gross investments Sales of investments * 2015* Q1/2015 Q1/2016 *As of 2014, the Group adopted IFRS for its financial reporting. **The calculation method of gross investments has been changed. Previously, gross investments in the cash flow were presented; starting from 31 Dec. 2015, investments on an accrual basis are presented * 2015 Q1/2015 Q1/ May

9 The rental housing stock focuses on the Lumo segment 31 March 2016 The situation after the Y-Foundation transaction 28,901 8,392 28,901 3,806 Lumo apartments VVO apartments Lumo apartments VVO apartments 11 May

10 The selling of apartments to the Y-Foundation proceeds The transaction scope has been further specified: 8,631 rental apartments subject to so-called long-term restrictions (years ). The estimated sales price is approximately EUR 75 million. The final sales price is the maximum transfer price confirmed by ARA. The first phase of the transaction was executed on 31 March The second phase of the transaction is estimated to be executed by the summer. 11 May

11 Rental occupancy rate remained stable Rental occupancy rate Tenant turnover 30 % Turnover Internal turnover Q1/2015 Q1/ Q1/2015 Q1/ May

12 Housing stock developed favourably Fair value EUR million , , ,705.3 (EUR million) FY 2015 YTD 2016 Change , ,351.1 Investment properties 3, , Investment property held for sale Fair value, total 3, , Fair value measurement Q1/ May

13 Equity ratio remained strong Equity per share, EUR Equity ratio, % * 2015 Q1/2015 Q1/ * 2015 Q1/2015 Q1/2016 *As of 2014, the Group adopted IFRS for its financial reporting. 11 May

14 Loan portfolio structure and distribution of loan maturities, Lumo segment 31 Mar Loan portfolio structure (EUR 1,401 million) Distribution of loan maturities 0.6% 7.1% 11.1% 16.8% 0.9% Subsidised loans EUR 235 million Annual payment loans EUR 13 million Loans from the market (bilateral) EUR 889 million Bond EUR 100 million Other loans EUR 9 million EUR million % Commercial papers EUR 156 million Market Interest subsidy Annual payment Others Commercial papers VVO VVO Group Group plc s Interim plc s Report Interim 1 Jan. 31 Report Mar. 1 Jan Mar May

15 LTV and loan development % 60 LTV (Loan to Value) % Average interest rate, maturity and interest rate linkage period of loans (Lumo segment) years Group Lumo business ,0 2,9 2,8 2,7 2,6 2,5 2,4 2,3 2,2 2,1 2, ,0 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0, Q1/2015 Q1/2016 Average interest rate, % Average loan period Average interest rate tying period 11 May

16 Strategic key figures Key figure Target 2018 Apartment assets Operative result of the Lumo segment as a percentage of turnover Equity ratio Lumo segment VVO segment EUR 5.0 billion 45,000 apartments Implemented 31 March 2016 EUR 3.7 billion 37,293 apartments 32% 35% > 35% > 12% 44.4% 23.4% Net promoter score 40% 38%* *Average of the values implemented in May

17 EUR 100 million paid taxes to Finland Income taxes 4% 6% 23% Porperty taxes Transfer taxes 26% Employer contributions 26% 1% 4% 10% VAT not remitted included in investments VAT not included in other procurements VAT remitted Withholding tax for fees Indirect employment effect in person-years 3, May

18 During the first months of the year, VVO Group invested EUR 43.7 million in rental apartments, which is estimated to have an employment effect of approximately 699* person-years and to accrue taxes amounting to roughly EUR 18** million. *The calculation method is based on the calculation method used by VTT and the Confederation of Finnish Construction Industries RT: a EUR 1 million investment in construction generates 16 person-years of employment. **VTT, RT: a EUR 1 million investment in the construction of apartment blocks accrues tax revenue and tax-like charges by EUR 410, May

19 Responsibility is part of our operations The anti-grey economy models exceed legislative requirements. We monitor the fulfilment of contractor obligations for all of the companies in our supplier network through the Reliable Partner service at the tilaajavastuu.fi website. The Rental Property Action Plan (VAETS) targets for 2016 have already been achieved and, with regard to property electricity consumption, have even been exceeded. During the review period, VVO Group became the first company in Finland to pilot on-demand emptying of waste containers. The pilot project was carried out in five Lumo properties with measuring equipment developed by Enevo Oy. The Virkeä sponsorship programme was expanded to cover not only individual sports but also team sports. In addition, each year 50 promising athletes of years of age are selected to receive sponsorship grants. 11 May

20 Outlook Market outlook The development of the Finnish economy will continue to be weak. Demand for rental apartments in growth centres will remain good. Urbanisation and asylum seekers will increase demand for housing. New development of owner-occupied apartments will be challenging. Price trends in owner-occupied apartments will remain stable. Interest rates will remain low. Outlook for VVO Group The rental occupancy rate is expected to remain at the current level. VVO Group estimates that sales-adjusted net rental income will increase. Investments are expected to exceed the 2015 level. 11 May

21 Appendices 11 May

22 Basic information of the company Under the Lumo and VVO brands, VVO Group Plc offers versatile and effortless rental solutions coupled with an extensive range of housing services for different life situations. The fair value of VVO s investment properties at the end of the review period was EUR 3.7 (3.8) billion, including EUR million classified into non-current assets held for sale. At the end of the review period, VVO Group owned 37,293 (40,760) rental apartments. 11 May

23 VVO Group Plc's strategy VVO Group plc today

24 Country-wide operations in good locations Asuntojen jakauma Helsinki Area 19,205 Tampere Area 4,991 Lahti Area 2,378 Oulu 2,374 Turku Area 2,191 Kuopio Area 1,537 Jyväskylä 1,367 Others Apartments 37,293 Properties 1,375 Average age of buildings 32.7 yrs Average area of apartments 56.3 m 2 Residents numbering nearly 55,000 Apartments 2,1 million dwelling m 2 11 May

25 Consolidated income statement EUR 1, / / /2015 Turnover 95,895 90, ,944 Property maintenance costs -28,260-27,003-96,989 Renovation and repairs -6,852-8,455-46,541 Net rental income 60,782 55, ,413 Administrative costs -9,745-9,858-39,696 Other operating income and costs ,676 Profit/loss on sales of investment properties ,707 Profit/loss on sales of trading properties Change in the fair value of investment properties 14,054 26,001 70,317 Amortisations and depreciation ,178 Operating profit 66,713 72, ,235 Financial income and expenses -12,418-12,258-37,090 Share in profits of associated companies Profit before taxes 54,295 60, ,701 Current tax -14,849-4,267-22,103 Change in deferred taxes 4,579-7,977-23,183 Profit for the period 44,026 48, , May

26 Balance sheet EUR 1,000 ASSETS Group 31 Mar Group 31 Mar Group 31 Dec Intangible assets 1,029 1,304 1,136 Investment properties 3,522,143 3,782,088 3,464,944 Property, plant and equipment 31,465 31,589 31,242 Share in associated companies 1,039 3,508 1,039 Financial assets held for sale Non-current receivables 2,911 2,741 2,199 Deferred tax assets 16,608 12,681 11,966 Non-current assets 3,575,738 3,834,457 3,513,069 Non-current assets held for sale 187, ,003 Inventories 864 2, Current tax assets 1,358 2,151 1,740 Sales receivables and other receivables 13,471 16,452 8,759 Financial assets 66,742 67,130 54,579 Cash and cash equivalents 137, , ,017 Current assets 220, , ,049 ASSETS 3,983,425 4,031,332 4,236, May

27 Balance sheet EUR 1,000 SHAREHOLDERS EQUITY AND LIABILITIES Group 31 Mar Group 31 Mar Group 31 Dec Share capital 58,025 58,025 58,025 Share premium 35,786 35,786 35,786 Contingency fund Fair value reserve -48,762-36,151-32,613 Reserve for invested unrestricted equity 17,856 17,856 17,856 Retained earnings 1,666,402 1,528,183 1,659,401 Parent company shareholders interest 1,729,324 1,603,717 1,738,472 Non-controlling interest Equity, total 1,729,919 1,604,236 1,739,055 Loans 1,247,341 1,662,500 1,259,823 Deferred tax liabilities 425, , ,782 Derivative instruments, non-current 71,254 57,950 48,378 Statutory provisions 916 1, Other non-current liabilities 6,740 7,496 7,131 Non-current liabilities, total 1,752,006 2,143,830 1,746,042 Non-current liabilities held for sale 137, ,083 Loans, current 259, , ,730 Derivative instruments 1,645 1,144 1,289 Profit-based tax liabilities 21,318 13,910 9,885 Trade payables and other debts 82,135 74,592 38,036 Current liabilities, total 364, , ,940 Liabilities, total 2,253,506 2,427,096 2,497,065 SHAREHOLDERS EQUITY AND LIABILITIES 3,983,425 4,031,332 4,236, May

28 Business operations Lumo 1 3/2016 Lumo 1 3/2015 VVO 1 3/2016 VVO 1 3/2015 Group 1 3/2016 Group 1 3/2015 Turnover, EUR million Operating profit, EUR million Profit before taxes, EUR million Balance sheet, EUR million 3, , , , ,031.3 Equity, EUR million 1, , , ,604.2 Equity ratio, % Apartments 28,901 20,019 8,392 20,741 37,293 40,760 Financial occupancy rate, % Rental occupancy rate, % Tenant turnover, % Average number of personnel May

29 Financial key figures Lumo segment VVO segment 31 Mar Dec Sep Jun Mar Mar Dec Sep Jun Mar Equity ratio, % Interest cover *) *) Hedging ratio, % Average interest rate, %**) Average loan period, years**) Average interest rate linkage period, years**) Secured loans/fair value of properties, % **) VVO Group Available guarantees***) / fair value of properties, % **) VVO Group *) Calculated from FAS figures **) According to the new segment division starting from 31 December Furthermore, in the future, the average loan period will be calculated also taking into account loan instalments according to plan ***)available guarantees = fair value of properties guarantees given 11 May

30 Contact details: CEO Jani Nieminen tel (0) CFO Erik Hjelt tel (0) May